Christmas-born pigs are a major step towards successful
production of animal organs and cells for human transplantation use.

PPL Therapeutics Plc, one of the world’s leading biopharmaceutical companies
in the application of transgenic technology to the production of human proteins
for therapeutic and nutritional applications, is pleased to announce it has
produced ‘knock-out’ piglets which were born as a result of using nuclear
transfer (cloning) and PPL’s patented gene targeting technology. The five
healthy births took place on Christmas Day, 25 December 2001. It has always been
the objective of PPL’s xenotransplantation programme to produce ‘knock-out’
pigs. In future, this vital step should enable organs and/or cells from such
animals to be transplanted into humans and not be rejected by the human
recipient. A ‘knock-out’ pig has the specific gene that leads to the human
immune system rejecting pig organs inactivated.

The announcement today achieves a key milestone that PPL has pursued in the
area of xenotransplantation. In view of the fact that PPL’s financial resources
are being focused primarily upon bringing its lead product recAAT, for the
indication hereditary emphysema, to the market as quickly as possible, PPL
proposes to find a ‘spin out’ partner to take the ‘xeno’ and stem cell areas
forward. This development demonstrates PPL’s leading position in this area and
it will be of significant interest to all companies involved in transplant
technology.

Pigs are the preferred species for xenotransplantation on scientific and
ethical grounds. It is anticipated the first application of this technology will
be the testing of insulin-producing islet cells for the treatment of diabetes
from the ‘knock-out’ pigs, first in primates, and soon thereafter in humans.
Clinical trials could start in as little as four years and analysts believe the
market could be worth over $5 billion for solid organs alone, and $6 billion for
cellular therapies for Diabetes, Parkinson’s and Alzheimer’s Diseases.

The gene that has been ‘knocked-out’, the alpha 1,3 galactosyl transferase (GT)
gene is responsible for making an enzyme that adds a sugar to the surface of pig
cells which is recognised by the human immune system as foreign, and which
therefore triggers an immune response leading to hyperacute rejection by the
human patient, of the transplanted organ or cell, within minutes. The ability to
delete or ‘knock-out’ this gene, therefore, provides a vital step in producing
pigs with organs and cells useful in humans.

PPL’s comprehensive xenograft programme relates to both its technology and
its Intellectual Property portfolio. In addition to overcoming early hyperacute
rejection, the Company has also shown proof-of-concept and has patents for
solutions for all aspects of xenograft rejection including delayed xenograft
refection, coagulopathy, and chronic T cell mediated rejection. Thus the ‘GT
knock-out’ pig will serve as the platform for adding up to three more genes, and
include a T cell tolerance regime to address all stages of rejection.

The ‘knock-out’ work was carried out by PPL Therapeutics Inc, PPL’s US
subsidiary located in Blacksburg, Virginia, and was partly supported by an ATP
Grant from the US Government’s National Institute of Standards and Technology (NIST).
The piglets, all females, were confirmed through DNA tests to have one of their
two copies of the GT gene inactivated. They have been named: Noel, Angel, Star,
Joy and Mary.

Ron James, Director at PPL said:
"Today’s announcement is a natural breakpoint for PPL to spin out the valuable
technology it has developed thus far. In light of this news, finding a third
party at this particular time to take forward this very exciting area of
science, which addresses major markets, will ensure that PPL’s shareholders gain
maximum value, whilst protecting the Company’s limited cash resources needed to
bring its lead product, recAAT, to market as quickly as possible."

Alan Colman, Research Director at PPL said:
"The successful cloning of these pigs is a major step in achieving PPL’s
xenograft objective. Together with the Roslin Institute, we were the first to
clone an adult mammal, Dolly. PPL was also the first to demonstrate gene
targeting in livestock, the first to clone pigs, and now the first to report
alpha 1,3 ‘GT knock-out’ in pigs for xenotransplantation. With one of the major
technical hurdles and scientific risks overcome, the promise of
xenotransplantation is now a reality, with the potential to revolutionize the
transplant industry".

Dr. David Ayares, COO and VP of Research at PPL’s US
Division stated:
"The birth of these pigs is a critical milestone in our xenograft programme and
should spark renewed vigor from both the scientific and investment communities.
This advance provides a near term solution for overcoming the shortage of human
organs for transplants as well as insulin-producing cells to cure diabetes.